From the Stephenson Harwood ESG group
Increasingly, businesses worldwide are all strengthening their environmental, social and governance (ESG) performance in the fight against the crippling effects of climate change. Consumers are also becoming more conscious of ESG issues, which is influencing their purchasing decisions wanting to purchase products from organisations that meet excellent ESG targets. Yet companies engaging in ESG activities need to understand that they are not exempt from their obligations to comply with competition laws.
Businesses will look to collaborate with competitors to successfully implement and achieve their desired ESG goals as it is often more efficient and practical to share expertise and costs (for instance, by setting industry standards or certain “green” targets, improving product quality or replacing products which are produced in a less sustainable manner). But any form of competitor collaboration or cooperation cannot be used as a cover up for anti-competitive conduct.
Similarly, ESG considerations are increasingly playing a role in the outcome of merger control reviews and even foreign investment control powers, with certain deals being pushed through where there are proven environmental benefits compared to other “dirty” deals or deals which prevent “green innovation”.
It is also widely recognised that significant investment from both the public and private sectors is required to address climate change, such that the issue of State aid and subsidy control will play a prominent role.
Protecting competitive markets contributes to the pursuit of sustainability objectives and our competition team can help businesses navigate the complexities of competition law to enable them to realise their commercial and ESG objectives. In particular, as competition laws are being updated and revised to reflect broader sustainability policies, it is becoming more difficult for businesses to assess whether their commercial practices fall on the right side of the competition rules. Our competition team have extensive expertise across the full spectrum of competition laws advising international clients across a variety of sectors.
Our areas of expertise include:
Advising a major player in sustainable waste management and renewable energy solutions on the creation of four joint venture "energy from waste" development projects. These facilities will prevent non-recyclable waste from entering landfills, instead using it as fuel to generate low-carbon heat and power.
Bringing an action in the European Courts on behalf of a nuclear power generator to contest the compatibility with the EC Treaty of a package of rescue and restructuring State aid awarded to a competitor by the United Kingdom Government.
Advising a client on the risks associated with recovery of interests of wind energy feed-in tariffs considered as an unlawfully granted State aid in the context of a due diligence review.
Representing a private equity firm in its investment in a major waste management company, active in environmental technology, environmental services and industrial packaging.
Advising an infrastructure investment firm focused on investments in energy, transportation and utility assets, in the acquisition of a French company which owns and operates natural gas-fired electric generation facilities in France, including reviewing the power purchase agreements concluded by the target company.
